Don't We Deserve a Better Board?

If we have to play by the PLCB rules...could we at least get a better set of players?

Back in 2015 in the Annual Report (page 2), the vision of the PLCB was stated as: "Be recognized as the best-in-class wine and spirits retailer, distributor and regulator in the United States."

Which meant that they wanted to be better than Utah, the only other wine and spirits retailer, distributor, and regulator in the United States. Not a high bar, considering Utah is practically an anti-alcohol theocracy. Four years later, how are they doing? Let's start at the top and go from there.

The Pennsylvania Liquor Control Board has three members, none of which over the past 85 years has any previous knowledge of the liquor industry or about running a 2 billion dollar enterprise.

We have a Chairman who has no experience with even a million dollar business, let along something the size of the PLCB. He did make it to Congress, and served on the Livestock, Dairy, and Poultry subcommittee, and Transportation and Infrastructure committee, before the citizens decided that he wasn't doing the job they wanted and voted him out. Since there isn't much call for somebody who's chummy with with politicians, and knows a little about Livestock, Dairy & Poultry, the PLCB was a perfect place to put somebody who was owed a couple of favors.

Governor Corbett appointed Republican benefactor Mike Negra to the board. Mr. Negra does have a history of being involved in multiple successful businesses, so at least he has a concept of what is going on, but no actual hands on with the liquor business, or anything the size of the PLCB.

Lastly we have the newest member and first woman ever to serve on the board, Mary Isenhour. Although you wouldn't know it by looking at the PLCB website. Here it is, over a MONTH after her confirmation, and the PLCB still hasn't decided if she rates being included with the other board members. (Let's see how long it takes for them to include her once this is published.)*

Keeping the public informed through transparency is sadly not the way the PLCB works.  Remember that it took over 100 days before they removed Michael Newsome, and that was only after I poked them with a stick again. Newsome might still be there if I hadn't said anything.

What are Isenhour's qualifications? She was Gov. Wolf's Chief of Staff and a campaign aide. Her business experience is like the others, desperately lacking in knowledge and size. She replaced Michael Newsome, who was Gov. Wolf's CFO in the furniture business -- can't get more qualified to sell liquor than that...or can we?

Remember how we were comparing the PLCB to Utah's State Store System of Stores? So how does the Utah DABC stack up? They have a seven member board that's appointed, but there is also an advisory board of seven members...who must come from defined specific areas of expertise. The Governor can't just willy nilly pick his favorite dog walker to sit on the Advisory Board. Utah specifies that the advisory board members are selected from the following areas of expertise.

Retail Alcohol Industry — Wholesaler Industry — Manufacturing Industry — Restaurant Industry — Utah Substance Use and Mental Health Advisory Council — Alcohol or Drug Related Enforcement — Division of Substance Abuse and Mental Health — Alcohol or Drug Abuse Prevention and Education

The Utah version of a Superstore

Another view. Pretty nice, right? 

It is almost certain that since this system was adopted every Utah DABC Advisory member is far more qualified than any that have ever been appointed to the PLCB. This doesn't mean that Utah hasn't had their share of people of limited competence on the Liquor Board. The Governor selects the seven members of the Liquor Board, so it can be and likely is as full of hacks and cronies as Pennsylvania. The difference is that the Utah board can't go off the rails making arbitrary decisions without an adult from the Advisory Board watching them. No deciding that 12 packs are cases, no robot wine armies, no variably price screwing the citizens, and no being over a Billion in debt. Oh, and they have had women on the Boards for years already.


End the PLCB jobs program - PRIVATIZE


*True to form it only took the PLCB 42 days to finally put up a picture.  Not quite as bad as the 102 days it took to take down the board member she replaced.

100 Days and Counting -- Oh, Will You Look At That!

As I write this, former PLCB member Michael Newsome has been off the PLCB board for 100 days. But...his resumé is still on the PLCB website. It must be so hard having to find a page (on your own site) and push the Delete button. Until they delete it, you can see it here. If they finally got to it, here is a snip showing it was still up as of 12:37 March 18, 2019.

I got tired of waiting, so I sent them an email, just a little nudge (sent it this afternoon, March 18). I wonder if they realize that Mr. Newsome isn't coming back. When you can't even keep track of one of the top three guys running your agency, how well do you think they are doing with inventory, product choice, or other personnel?

It's said that if you take care of the little things. the big things take care of themselves. If you can't take care of either...you can always work for the PLCB.

Well, it turns out that poking them with a stick works. After posting about this on our Facebook page and sending them an email, they finally decided to remove the information — without any explanation about why it took so long. They did say that the "hidden page" had been removed, but guys...it wasn't hidden, you'd just removed the link. Pretty much the same way it went the last time I poked them about a Web screw-up. I should be getting some of that Joe Conti emergency consultant money!

Questions that should be asked

Since the PLCB never faces any real questions, or a press corps with the tough ones, we thought we'd provide a look at how that might go. It's all fictional, but hey, the PLCB says they're a "business," so we're on solid ground.

Chairman Holden, board member Negra, and board member Newsome: welcome to Face the Citizens.

   (Holden) Glad to be here Al.

Glad to have you here, gentlemen. As you know, this program is dedicated to helping the Citizens of Pennsylvania understand exactly what the Board does, and the why and wherefore behind some of your decisions. We'll start with your experience for the job. Have any of you been a director-level executive — or higher — in a $2 billion revenue company? Anyone? A $1 Billion company? A $200 Million company? No? Well, do any of you have any experience in the liquor industry? Ahh, yes Member Negra!

Chairman Holden did not actually say these things.

   (Negra) I have a bottle of wine with dinner sometimes.
   (Holden) We used to get pretty hammered after some of the caucus meetings, so I have tried a lot of different spirits.
   (Newsome) No.

Okay, do you know anything about the three tier system? I see a few heads nodding. Could you explain it for the readers?

   (Negra) Well Al, it would take far too much time to properly get across the complexities of the three tier system. We'd need a whole program just for that.

Fine with me, when can you do it?

   (Negra) I'd have to check my schedule and get back to you about that. You know the PLCB keeps us pretty busy; it's at least two or three days a month. It barely leaves time for our other work.

Board member Negra did not actually say these things.

Do any of you have experience with such common business tools as sales price variance analysis, proximity analysis or inter-type agglomeration analysis?

   (Holden) Wait a minute,  there is math involved?  Nobody told me there would be math.

Surely Member Newsome, you used these tools at Wolf Cabinets?

   (Newsome) Not to any great extent. You see, the market for cabinets isn't at all like the market for wine and spirits. The wine and spirits market is a police-enforced monopoly, as God intended. People can buy cabinets anywhere, based on price and quality and outlet convenience. It's quite different.

Board member Newsome did not actually say these things.

Of course. Let's move on to beer regulation. Chairman Holden, you had been voting for giving gas stations licenses that met the café space and register separation requirements up until Member Skip Brion left, then you suddenly started voting against those licenses, saying that your reason was that you wanted to see what the State Supreme Court was going to do. However, they didn't even agree to take the case until three months AFTER you started voting no. Then when Governor Wolf asked the Board to "Free The Sixpack," you just as suddenly started voting for them again. Care to explain?

   (Holden) That's in the past Al, nobody wants to hear that ancient history. What's done is done is what I always say. Especially at legislative hearings.

I see.  How about your new Executive Director? You went from somebody that had a firm grasp of how real retail works — John Metzger — to Charlie Mooney, who has no real world experience. This, at a time when some of the ways the PLCB does things are actually shifting toward how a real business would run. Any comments?

   (Holden) Charlie is a great guy, he's been here forever and knows how we do things.

But isn't how you do things the reason that things are changing? If you were better at how you did things, like say New Hampshire, there wouldn't be all these pushes for change.

   (Negra) Oh, we're not changing, we're modernizing. Think of it like new math. The numbers didn't change, just how you used them. That's the PLCB!

I guess that's another whole program. Moving on again... Last year you had record sales for the umpteenth year in a row. You also claimed record "profits." Let's talk about costs, specifically, why did the pension debt the PLCB owes only decrease by $550,000 in a year when you had all these record sales?

   (Newsome)  That is easy, Al. We spent the money on other things!

What other things? 

   (Newsome)  Other other things. Look, we don't have to pay any interest on the pension debt, so there is no hurry to pay it off. As a state agency, we can't go bankrupt, so it just isn't that important. With all the consultants and relatives we'll have to hire because nobody in house can deal with Act 39, I doubt it will go down much next year either.

But doesn't the state have to pay interest on the money they borrow to cover that shortage?

   (Newsome) Of course the state does, but WE, the PLCB, don't. So...not on our balance sheet!

Thanks for being so upfront about that. It looks like we are just about out of time. Thank you for being on Face The Citizens. I look forward to you coming back again.

(Hot mic catches...)
   (Newsome) Nope,
   (Holden) Not gonna happen.
   (Negra) Don't bet on it.


Do I need to say it? PRIVATIZE.